Hiring for Experience?Skills Are Not the Whole Answer

Gina Dokko is an assistant professor of management. Her research focuses on organizational theory and behavior, social networks,

When firms decide to branch out into a new area of business, they might feel the need to hire new employees from outside the organization, as most hiring managers assume that the best candidates are those who have performed the exact role before. The reasons for that are perfectly sensible—they want an identical skill set so the new hire will hit the ground running.

In conducting research for our paper “Venturing into New Territory: Career Experiences of Corporate Venture Capital Managers and Practice Variation,” my coauthor and I were interested in the career backgrounds of managers working in new corporate venture capital (CVC) units of U.S. IT companies. These units were created because company leaders were impressed by the huge returns seen in venture capital investing. They decided that their companies could get into the game in order to branch out, increase their revenue stream, and at the same time, get a leg up on new technology being developed by startups.

Since these were new units and they were modeled on venture capital practices, companies looked to hire CVC managers with venture capital investing experience. But independent venture capitalists’ primary goal is financial returns, while the hiring companies had an added incentive to gain technological knowledge or IP from startups to supplement their internal technology areas.

We learned that recently hired venture capital managers had specific career backgrounds that affected the decisions they made and the outcomes of their business units, some of which did not meet the firm’s goals and intentions. Given this, we realized that the hiring companies needed to be more thoughtful about how they viewed a job candidate’s qualifications by taking into account the broader strategy of a business area. We found that hiring managers needed to be crystal clear about the objectives of the job and, second, they needed to understand what other characteristics a candidate brought to the table that would make them a good fit with the job and firm.

Experience and Skills: Not the Whole Picture

From our research, we learned that hiring based on skills is only part of the picture. CVC managers do a lot of the same tasks as venture capitalists working at independent VC firms: finding potential startups to invest in, doing due diligence on these startups, and then making decisions or recommendations to invest or not. And surely enough, former VCs could get financial returns for CVC units. However, they were less successful in meeting the strategic technology goals of the CVC units.

Bringing “Baggage”

So, work skills are only part of the picture. The other part of the story is that people carry “baggage”—norms, assumptions about what constitutes good performance, learned behaviors—from their previous experiences. In the case of these CVC managers, if they were hired from independent VC firms, then their assumption is that a big financial hit is the primary goal, but when they come into a CVC unit, it was just as important that their investment targets fit with the company’s overall technology and business strategy.

It’s harder to get rid of these assumptions and norms than you’d think: they tend to be quite sticky. It’s always necessary for some un-learning, some re-learning and some new learning when it comes to joining a new organization.

Theory to Practice: Implications for Hiring Managers

In 2009 I conducted a study of insurance adjusters working at call centers: “Unpacking Prior Experience: How Career History Affects Job Performance.” The study looked at Insurance Company A, a high-end firm that prioritized premium customer service, which regularly hired adjusters from Insurance Company B, a cost-focused firm whose adjusters were expected to manage payouts carefully.

When Company A hired from Company B, they picked candidates with lots of occupational experience, the right skills and the right knowledge; they expected these adjusters to hit the ground running. However, the new hires brought norms and assumptions with them that were not entirely desirable to Company A. For example, haggling with a customer was part of good performance in Company B, but in Company A the practice was frowned upon. It resulted in an unexpected hiccup in performance for these experienced adjusters.

The message is not that it’s bad to hire experienced people; rather, the lesson is that you always get a little more than you expect. Employees are whole people: they bring biases, patterns of behavior and assumptions about what behaviors and results are valued—and these assumptions can be deeply and even unconsciously held.

Hiring managers need to be aware that regardless of experience level, new employees need to be re-socialized and trained in the context of the hiring organization in a way that goes beyond skills. Well-designed new employee orientations are just as critical to experienced hires, and onboarding processes should account for the different types of orientation that they need.

The bottom line is that hiring managers need to consider the strategy and goals of both the position and the firm overall, and understand how to leverage those to inform the hiring process. They also need to be aware of their company’s culture, and what they really expect from employees. Finally, it’s necessary to develop an effective onboarding process that helps new hires to unlearn as well as learn in order to set them up for success.

Comments

Venturing into the new implies you do no have a full skills base, so you need to seek experience to fill the gap. Agree that this is not the whole picture (or perhaps better - not the whole person). However, it is the best start. A couple of other posts add to the mix.
Recent discussions over mindset vs skills come to mind (see: http://www.ideachampions.com/w...). And hiring for skills (see: http://www.forbes.com/sites/bi...)
Bill Fisher (IMD) contends.
"...here’s a new mantra: For everyday work, hire for attitude, train for skills; but when big change, such as innovation, is envisioned, then hire for skills (because you need them) and figure out how to deal with the attitudes (because, all too often, they come along with the skills)."
Go for skills/experience first, and look for the candidate who wants to work for you (or the company you aspire to be). That may be a candidate willing to ask questions such as on this post. http://mashable.com/2012/07/01...

I have just posted to you blog (comment on hiring for skills) and did not include an identifier. I mistakenly thought I would have opportunity to do this before the post went to moderation. My apologies
My name is Shaun Coffey
email is shauncoffey@bigpond.com
blog http://shauncoffey.blogspot.co...
twitter @ShaunCoffey